EPAct 179D Experts

"The least expensive kilowatt, is the one not used."

- Jacob Goldman

The EPAct Tax Aspects of Lady MAGA

Four of the world's leading rock star technology companies with numerous
facilities include Microsoft, Amazon, Google and Apple, and are we what refer
to as Lady MAGA. These businesses are characterized by large headquarters, many
of which are located in California, office buildings, campuses, and huge data
centers. In addition to common major facility categories, some of these tech
giants have some large business-segment related facilities. Apple has
its’ Apple retail stores, Google's Motorola acquisition requires
manufacturing facilities, and Amazon has a large, leading-edge distribution
center network. These businesses are growing and are currently involved in
major expansion activities that provide the opportunity for building equipment
purchases that can substantially reduce energy use while earning large energy
tax incentives for doing so.

EPAct Tax Opportunity

The Energy Policy Act of 2005 (EPAct) provides an immediate tax deduction of
up to $1.80 per square foot for building investments that achieve specified
energy cost reductions beyond the American Society of Heating and
Air-conditioning Engineers (ASHRAE) 90.1 -2001 building energy code standards.
A one-time $1.80-per-square-foot deduction is the maximum tax deduction
available, but deductions of up to 60 cents per square foot are also available
for the three types of building systems: lighting, including lighting controls;
HVAC; and the building envelope, which includes roof, walls, windows, doors and
floor/foundation (everything on the perimeter of a building that "touches" the
outside world). To obtain a tax deduction of 30 cents per square foot for
lighting, the wattage must be reduced by 25 percent from ASHRAE 90.1 -2001
levels. The maximum allowable tax deduction of 60 cents per square foot
requires a 40-percent reduction in wattage for lighting.

The Potential EPAct Opportunities for the Lady MAGA Companies

Each of the four Lady MAGA companies has published square footage data in
their 2010 SEC 10-K annual financial report. The following charts illustrate
the EPAct tax savings potential for each company based on their publicly
reported total square footage.

Recent Acquisitions: The Emerging Lady MAGA Real Estate Trend

The past two years have seen a major uptick in the scope and diversity of
real estate holdings of each of the Lady MAGA companies. For instance, in
October 2011 Google purchased a 240,000 sq. ft. building near its headquarters
in Mountain View, California. That acquisition came quickly on the heels of an
August 2011 transaction whereby the tech giant entered into a lease for a
716,000 sq. ft. office building in Sunnyvale, California. On the other side of
the country, 111 Eight Avenue in New York City is a 2.9 million sq ft. office
tower that Google purchased in late 2010. On top of these primarily office
acquisitions, Google has many large-scale data centers throughout the country
in order to process. All told, these buildings add up to the over seven million
square feet around the country, square footage that is primed for major energy
retrofits and tax savings.

Amazon just moved into a 13 building corporate office and has numerous large
U.S. warehouses that is uses as fulfillment centers for its online customers.
Amazon's continued expansion underscores the increasing importance of the Lady
MAGA companies to the nation's economy, as the demand for online products and
services has not slowed down in the face of the economic downturn.

On top of a tremendous data center that Apple opened a few years ago in
Maiden, North Carolina, the tech giant, which is the most valuable company in
the world, has proposed a new "spaceship" office building in Cupertino,
California, to be known as "Apple Campus 2." The proposed headquarters, which
is all but guaranteed to be built over the next few years, is going to function
as a small city including everything from a fitness center to its own power
plant. and date centers. At a total of 2.8 million square feet, the campus will
need to include highly energy-efficient systems to keep operational expenses to
a minimum.

One of the most energy intensive processes that each of the Lady MAGA
companies must account for is data processing. The below chart illustrates the
square footage of some of each company's data processing centers along with the
tax saving potential for each company.

Conclusion

Their tremendous financial strength and current growth initiatives provide
the Lady MAGA technology companies with large scale energy cost reduction and
tax savings opportunities. The activities of these companies are widely
followed and they themselves are communication experts so their accomplishments
should serve as examples for numerous other facility owners.